Financial Modeling for Beginners: Mastering the Basics - Sensitivity Analysis - Microsoft Excel

Example of how to build a sensitivity analysis table in Excel to evaluate how changing two inputs simultaneously will affect an output (profit). This is one of the functions in the "What-If-Analysis" section of Excel. ✅ Download the Excel template: https://mailchi.mp/f55b9222c05f/sensitivity-analysis-download 👉 Master the 20% of Excel that actually matters in 2.5 hours: https://www.ericandrewsstartups.com/excel-power-user-course 🚀 If you want to master the finance skills & frameworks to successfully scale technology startups, secure your spot in my "Finance for Startups" program, today: https://www.ericandrewsstartups.com/financeforstartups Communities: 💼 Linkedin: https://www.linkedin.com/in/eric-andrews-1624b656/ 💻 Newsletter: https://mailchi.mp/1cf66809482f/mcoa7eoc9w Related Finance Videos: 🚩 Solving a Finance Case Study | Interview Prep: https://youtu.be/qURd_jDrQsI 🚩 What is Financial Modeling? https://youtu.be/RghUyVCSdM4 ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ Sensitivity analysis in Excel is one of the skills that separates the common Excel user from the power user. Often we try to analyze business problems by thinking about what will happen if certain things change. For instance, what happens if we change the price? Well, the revenue would go up if we just change the price, but the total customers stay the same...but does that make sense? The reality is that you never have scenarios where one variable changes and everything else stays the same. Variables all change when you change one thing. When you raise the price, usually some customers will stop buying, and some won't. So when trying to analyze situations, it is better to try to build models and analyses that reflect many different variables changing at the same time. This is where sensitivity analysis comes in. Using this Excel feature, we are able to examine how multiple changing variables will affect different business metrics. To do this, we can build a "sensitivity data table" to examine the range of possible outcomes. In this tutorial, we learn how to build a sensitivity analysis table in Excel 2016 to evaluate how changing two inputs simultaneously will affect an output (profit). ► Subscribe for more finance videos: https://bit.ly/EricAndrewsSubscribe #sensitivityanalysis #excel